Bottom Line Up Front

Increase:

- Revenue:

2016

• w/o Strategy: $8677.9 million
• w/ Strategy: $8,822.9 million

2018

• w/o Strategy: $8,852.4 million
• w/ Strategy: $9,069.9 million

- Net Income:

2016

• w/o Strategy: $1,562 million
• w/ Strategy: $1,625.5 million

2018

• w/o Strategy: $1,681.9 million
• w/ Strategy: $1,808.8 million

- Earnings Per Share:

2016

• w/o Strategy: $1.325
• w/ Strategy: $1.379

2018

• w/o Strategy: $1.529
• w/ Strategy: $1.645

- Return on Assets:

2016

• w/o Strategy: .081
• w/ Strategy: .083

2018

• w/o Strategy: .073
• w/ Strategy: .077

eBay's Existing Statements

Mission/Vision:

Our mission is to be the world’s favorite destination for discovering great value and unique selection. We give sellers the platform, solutions, and support they need to grow their businesses and thrive. We measure our success by our customers’ success.

Our vision for commerce is one that is enabled by people, powered by technology, and open to everyone.

Objectives/Strategies:

We empower people and create opportunity through Connected Commerce.

We focus on empowering our sellers, not competing with them.

We are building stronger connections between buyers and sellers with product experiences that are fast, mobile, and secure.

We are transforming the individual selling experience to help you turn the things you no longer need into cash you can use.

Revised Statement

Mission:

Our mission is to be the world’s favorite destination for discovering great value and unique selection by providing a global online marketplace where practically anyone can trade practically anything, anytime, anywhere, enabling economic opportunity around the world. We give sellers the platform, solutions, and support they need to grow their businesses and thrive, through which merchants of all sizes can compete and win. We pioneer new ways for consumers to shop and pay from any connected device, and we drive technology advancements that will deliver the next generation of commerce. We measure our success by our customers’ success.

Current Financial Highlights

Statements:

2015 Revenues: $8,592 million

2015 Net Income: $1,725 million

2015 Earnings Per Share: $1.42

Financial Ratios:

2015 Current Ratio: 3.493

2015 Quick Ratio: 2.983

2015 Debt-to-Equity: 1.705

2015 Return on Total Assets: .097

Competitor Financial Highlights

Financial Ratios:

Current Ratio:

Amazon: 1.076

Google: 4.667

Industry Average: 3.078

Quick Ratio:

Amazon: .744

Google: 4.382

Industry Average: 2.713

Debt-to-Equity:

Amazon: .615

Google: .017

Industry Average: 1.940

Return on Total Assets:

Amazon: .009

Google: .111

Industry Average: .072

eBay's SWOT Analysis

Strengths:

Partnership with PayPal has simplified the purchase process for a range of devices and has increased security between users.

Classifieds division has websites with listings in over 1500 cities around the world that provide generally free listings for buyers and foster trade at a local level.

Marketplace has numerous vertical formats--Daily Deals, Fashion, Motors, Electronicts, etc.--which offer a range of products different from competitor offerings.

Flexibility in price-listing format either by auction-style or fixed-frice provides more user-friendly options.

World's largest internet marketplace, with a global customer base of 233 million, operating in 37 countries.

Buyer base grew by 8 million to 162 million total active buyers--this represents a 5% year-over-year growth.

Over 800 million live listings at any given time provides customers with extensive options for getting the best deal on any particular product.

Revenues for the StubHub and Classifieds divisions have each grown by 15% in the past year.

Employs 11600 people globally, 6200 of which are located in the U.S.

Use of PayPal allows currency exchange in worldwide markets and among differing currencies.

Weaknesses:

Credit ratings were downgraded as a result of the distribution of 100% of the outstanding common stock of PayPal to their stockholders, pursuant to which PayPal became an independent company.

2014 hack which stole user names, encrypted passwords and other data led to a loss of confidence in the company's safety measures from buyers and sellers.

Success depends largely on a few key personnel.

Cost of net revenues is continually increasing, with an 11% increase in 2014 and a 6% increase in 2015.

Buyers and sellers are limited to areas with internet access.

Policy of allowing anyone to make a listing opens the company to significant risk of fraudulent transactions or unsatisfactory delivery, etc.

Fees associated have been increasing over recent years, discouraging potential sellers from using the site.

Revenue is heavily dependent on the selling activity of third parties.

Share repurchase authorization has led to 13.5% decline in share value over the last year.

Extreme changes from year-to-year in net income has caused financial instability.

Opportunities

Mobile devices are increasingly being used for e-commerce transactions--nearly 30% of US e-commerce transactions are mobile; the number of mobile internet connections is expected to rise in 2016.

Consumers have higher levels of disposable income--per capita disposable income is expected to increase in 2016.

Consumers' propensity to conduct services online is increasing--the percentage of services conducted online is expected to grow over 2016.

Consumers are increasingly leveraging their mobile internet connections to purchase items on the go, enhancing the ease and convenience of online shopping.

World price of crude oil is expected to fall over 2016, decreasing shipping costs--a point of differentiation between competitors.

Growing economies in Asia and Europe are expected to increase use of online selling services.

New technology that matches a customer's clothing size and preferences can recommend purchases to shoppers, which will decrease product returns.

National Retail Federation indicates that online store sales are expected to grow between 6-9% over the next year.

Number of worldwide social media users is expected to reach 2.5 billion by 2018, accompanied by an expected increase in audience engagemment with sellers through social media platforms/outlets.

Physical retailers are increasingly looking to online marketplaces that can connect buyers with sellers in order to increase their sales audience.

Threats

Competitors control products and services that are important to success--for example, Google, which operates a shopping platform service, reduces the amount of search traffic directed to other marketplaces from searches on Google.

Sellers are increasingly utilizing multiple sales channels.

Expense and complication makes shipping of goods across national borders more difficult than domestic shipping.

Competition for key employees is intense.

Consumers are placing increased emphasis on the safety, reliability and privacy of ordering goods via the internet before placing an order.

Regional low-cost online retailers are stealing sales from global marketplaces in a number of market segments.

Many businesses in the industry are larger in size or have greater capitalization, as well as a secure position in other industries or significant markets.

Consumers who purchase or sell goods have an increasing number of alternatives, and merchants have many channels to reach consumers.

Barriers to entry for most online sales platforms are low, and businesses can easily launch their own sites or mobile platforms at nominal cost.

USPS shipping rates have increased 9.8% for priority and 14.4% for priority express shipping.

Bivariate SWOT Matrix Results

SO Strategies

Expand operations of Classifieds division to include more cities in Asia and Europe (S2, S5, S8, S10, O6).

Purchase ad space on social medias for Classifieds division (S2, O9).

Introduce a retailer-based search format to the Marketplace division for well-known physical retail brands/stores (S3, O10).

Introduce a "Recommended For You" search format to the Marketplace division (S3, O7).

Make deals with physical retail chains for online sale of their products through the Maketplace division (S6, O10)

Expand operations of StubHub division to include ticket offerings in Asia and Europe (S8, S10, O6).

Purchase ad space on social medias for StubHub division (S8, O9).

ST Strategies

Expand available locations of Classifieds division in areas where market share is being lost (S2, T6).

Purchase keyword associations from Google and other search engines to increase click traffic to product offerings (S7, T1).

WO Strategies

Offer a premium service yearly subscription for buyers through which eBay pays shipping on products ordered (W4, W7, W8, W10, O3, O5).

Develop contracts with physical retailers for discounted fees associated in exchange for a number of sales commitment (W7, W8, W10, O10).

Develop contracts with FedEx and UPS for discounted shipping rates in exchange for committed business from sellers (W4, W7, O5).

WT Strategies

Develop a more competitive compensation package for key employees (W3, T4).

Develop contracts with local shipping companies in international locations for discounted shipping rates in exchange for committed business from sellers in their area (W4, W7, T3, T10).

Offer discounted fees associated to sellers who commit their method of online sales to eBay (W7, W8, W10, T2, T8, T9).

Utilize the Marketplace seller rating system in the Classifieds division (W2, W6, T5).

Buy out regional low-cost online retailers (W8, T6).

Sell stock to generate more capitalization (W1, W8, T7).

Strategic Planning and Action Evaluation (SPACE) Matrix

Alternative Strategies

Strategy:

Expand Operations of StubHub division to include ticket offerings in Asia and Europe

Advantages:

• Takes advantage of eBay's global presence
• Takes advantage of the PayPal system of allowing direct currency exchange in sales
• Directly expands the buyer and seller base
• Capitalizes on the trend towards increased use of online selling services in Asia and Europe
• Takes advantage of the low barriers to entry for online sales platforms

Strategy:

Purchase ad space on social medias for StubHub division

Advantages:

• Takes advantage of eBay's global presence
• Increases access to new buyers
• Can be a direct link to sales
• Capitalizes on the growth of social media users worldwide, as well as audience engagement with sellers through social media
• Provides an additional route to product offerings that is not controlled by competing search engines such as Google

Quantitative Strategic Planning Matrix (QSPM)

Recommended Strategy:

Expand Operations of StubHub division to include ticket offerings in Asia and Europe

Implementation Plan

Immediately

Consult legal representatives about processes and possible issues in Madrid and Seoul.

Week 1

Contact and begin negotiations with sports and entertainment arenas both in Spain and South Korea.

Begin searching for properties for sale in both cities.

Begin planning and scheduling Exploratory trips.

Week 2

Begin necessary business licensing and contract negotiations.

Week 3

Look up available office locations and begin contracts

Week 4

Assign project team leaders. Recruit talent from local areas. Hire positions with one as a manager in training.

Week 5

Send (2) teams of executives for exploratory trips to both cities to be immersed in the culture and for meeting face to face with local officials and businesses.

Week 6

Continue contract negotiations and recruitment

Week 8

Have office rented and ready to move in. Finalize HR decision regarding employees. Begin website development and network for Spain and South Korea.

Week 9

Employee Training and Development

Intensive training & Team Building

Week 10

Dividing into project teams and have specific tasks assigned.

Week 12

Have new firms fully established and operating and begin working on establishing a network presence in Madrid and Seoul.

Week 26 (6 months)

Perfomance reviews for all employees

Week 52 (1 year)

Transition current executive out of the location.

The current manager of the location transitions out and replaced by another rising employee in training

Ethical Considerations

Scalping

"The practice of an individual either reselling individual tickets online or outside the event"

• Profit-making involved along with potential for exorbitant prices
• Not prohibited by any federal law, but is considered a misdemeanor in at least 15 states

Revenue and Costs

Additional Revenue From Strategy:

2016: $145,000,000 additional revenue

2017: $181,250,000 additional revenue

2018: $217,500,000 additional revenue

Costs From Implementation:

- Marketing: $31,900,000

- Office Space: $281,720

- Employee Salaries and Benefits: $7,227,240

- Employee Training: $52,800

- Trips: $44,490

- Web and Server Development: $1,000,000

- Office Computers: $22,000

- Office Furnishings: $200,000

- Utilities & Internet: $17,508

Total Costs: $40,745,758

Projected Financial Highlights

Revenue:

2016

• w/o Strategy: $8677.9 million
• w/ Strategy: $8,882.9 million

2018

• w/o Strategy: $8,852.4 million
• w/ Strategy: $9,069.9 million

Net Income:

2016

• w/o Strategy: $1,562 million
• w/ Strategy: $1,625.5 million

2018

• w/o Strategy: $1,681.9 million
• w/ Strategy: $1,808.8 million

Earnings Per Share:

2016

• w/o Strategy: $1.325
• w/ Strategy: $1.379

2018

• w/o Strategy: $1.529
• w/ Strategy:$1.645

Net Present Value and Internal Rate of Return

Net Present Value: $87.21 Million

Internal Rate of Return: 62%

EPS/EBIT Analysis

Balanced Scorecard

Biblical Integration

A business strategist should handle finances with integrity

Biblical warnings regarding money--Proverbs 28:20, 22, 25

• A faithful person will be richly blessed, but one eager to get rich will not go unpunished
• The stingy are eager to get rich and are unaware that poverty awaits them
• The greedy stir up conflict, but those who trust in the Lord will prosper

Luke 16 parable

• Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much

"The purpose of a business is to make a profit, ethically, based on Christian principles" - Dr. Moore

References

Bloomberg. (2016, April 27). Company Overview of eBay Enterprise, Inc. Retrieved from Bloomberg: http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=120909

David, F. R., & David, F. R. (2015). Strategic management: Concepts and cases (15th ed.). Boston, MA: Pearson.

eBay Inc. (2015). eBay annual report. Retrieved from http://files.shareholder.com/downloads/ebay/1917561754x0x882672/742AC716-B4DB-40F8-83B0-793F0D6BDA5C/EBAY_2015_Annual_Report.pdf

Ebay, Inc. (2015). 10-K Annual Report.

Fablo, M. (2009). Who needs tickets? Is ticket scalping legal? Retrieved April 24, 2016, from https://www.legalzoom.com/articles/who-needs-tickets-is-ticket-scalping-legal

IBISWorld. (2016). E-Commerce and online auctions in the US. Retrieved April 25, 2016, from http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1930

Jurevicius, O. (2013). SWOT analysis of eBay. Retrieved April 25, 2016, from https://www.strategicmanagementinsight.com/swot-analyses/ebay-swot-analysis.html

Karlinsky, N., & McLean, B. (2013). StubHub, revolutionizing the modern-day ticket scalper. Retrieved April 25, 2016, from http://abcnews.go.com/Business/stubhub-revolutionizing-modern-day-ticket-scalper/story?id=18421695

Reynolds, T. (2016). NRF forecasts retail sales to grow 3.1% in 2016. Retrieved April 25, 2016, from https://nrf.com/news/nrf-forecasts-retail-sales-grow-31-percent-2016

StubHub. (2016). In Wikipedia. Retrieved April 24, 2016, from https://en.wikipedia.org/wiki/StubHub